1. State the importance of cash flows. [Marking Scheme: Any 3 importance- 3 marks] 2. On...
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1. State the importance of cash flows. [Marking Scheme: Any 3 importance- 3 marks] 2. On April 10, Sangi Corporation purchased 5,000 shares of its own stock for $40,000 cash. On November 10, Sangi reissued 1000 shares of this treasury stock for $11000. Prepare the April 10 and November 10 journal entries to record Sangi's purchase and reissuance of treasury stock. [Marking Scheme: 2 marks each for 2 journal entries and 1 mark for explanation (2*2=4)+1=5 marks] 3. Travel Assist Co. has the following information: The company has $50,000 net income in the current year and declares dividends of $8,500 on its noncumulative preferred stock. Quantum has 5,000 weighted-average common shares outstanding during the year. Company expects to pay a $5 per share cash dividend this year on its common stock. The current market value of Travel Assist stock is $22.50 per share. a. Calculate EPS b. Compute the expected dividend yield. [Marking Scheme: 2.5 marks EPS and 2.5 marks for dividend yield(2.5+2.5=5 marks)] 4. Data related to ANAND Company in the current year is given below: Plant costing $25000 with accumulated depreciation of $13000 is sold for cash at a loss of $4500. Cash $42500 paid to retire bonds. New equipment $12300 purchased during current year. $16200 dividend paid to stockholders during current year. $523800 received from customers on account of credit sales. $246445 paid to purchase inventory. Operating expenses paid to current year is $132250. Income tax expense is $12060. Cash account balance at the end of previous year is $25736. 1. State the importance of cash flows. [Marking Scheme: Any 3 importance- 3 marks] 2. On April 10, Sangi Corporation purchased 5,000 shares of its own stock for $40,000 cash. On November 10, Sangi reissued 1000 shares of this treasury stock for $11000. Prepare the April 10 and November 10 journal entries to record Sangi's purchase and reissuance of treasury stock. [Marking Scheme: 2 marks each for 2 journal entries and 1 mark for explanation (2*2=4)+1=5 marks] 3. Travel Assist Co. has the following information: The company has $50,000 net income in the current year and declares dividends of $8,500 on its noncumulative preferred stock. Quantum has 5,000 weighted-average common shares outstanding during the year. Company expects to pay a $5 per share cash dividend this year on its common stock. The current market value of Travel Assist stock is $22.50 per share. a. Calculate EPS b. Compute the expected dividend yield. [Marking Scheme: 2.5 marks EPS and 2.5 marks for dividend yield(2.5+2.5=5 marks)] 4. Data related to ANAND Company in the current year is given below: Plant costing $25000 with accumulated depreciation of $13000 is sold for cash at a loss of $4500. Cash $42500 paid to retire bonds. New equipment $12300 purchased during current year. $16200 dividend paid to stockholders during current year. $523800 received from customers on account of credit sales. $246445 paid to purchase inventory. Operating expenses paid to current year is $132250. Income tax expense is $12060. Cash account balance at the end of previous year is $25736.
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Quiz 1 1 The importance of cash flows include It provides information about the companys operating performance and financial position It is useful in ... View the full answer
Related Book For
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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